Editor’s note: This very, very limited tariff deferral program would have been a lot bigger if CPA and others had not gotten involved to block a blanket deferral of tariffs.
Move won’t apply to goods imported from China, steel or aluminum
[William Mauldin | April 19, 2020 | WSJ]
The Trump administration said it would allow some companies to delay payment of import tariffs due to economic hardship triggered by the new coronavirus, but the relief was much more limited than many officials and business leaders had signaled.
The Treasury Department on Sunday announced a rule in conjunction with U.S. Customs and Border Protection to allow companies to delay for 90 days the payment of tariffs on certain goods coming into the U.S. in March and April.
U.S. importers seeking a tariff-payment delay must “demonstrate a significant financial hardship” and have operations that are “fully or partially suspended during March or April 2020 due to orders from a competent governmental authority limiting commerce, travel, or group meetings.”
The measure fell short of the across-the-board tariff deferral or even elimination sought by big business groups and retailers.
President Trump’s special tariffs on Chinese goods and steel and aluminum imports weren’t included in the tariff-deferral offering, and other punitive tariffs on dumped and subsidized products also can’t be delayed, according to the temporary rule.
Chad Wolf, acting homeland security secretary, said the decision “gives the Administration the ability to help the trade community and U.S. businesses who keep critical supply chains for U.S. manufacturers moving during this unprecedented time.”
The latest plan to delay for 90 days the payment of tariffs—essentially taxes at the border paid by U.S. importers—follows previous moves to delay corporate income-tax payments during what is expected to be a sharp economic downturn.
Rep. Kevin Brady of Texas, the top Republican on the House committee that oversees trade, said the new tariff measure “will free up much-needed cash, allowing these businesses to pay these duties when they, as well as the economy, are on sounder footing.”
The tariff issue rekindled a sensitive debate in an election year, with the steel industry, trade hawks and lawmakers who support domestic industries rejecting earlier proposals to delay payments.
Backers of tariffs and Mr. Trump’s “America first” trade policy have emphasized that any payment delays don’t amount to forgiveness of duties on imported goods.
The divide between products—with some eligible for delays while others aren’t—is likely to generate complaints from industry and could sow confusion.
Many goods are subject both to ordinary tariffs allowed under international agreements and special tariffs stemming from Mr. Trump’s trade war with Beijing or other punitive duties.
While the Trump administration quickly and broadly delayed payments of personal and corporate income taxes, the suspension of tariffs has aroused intense debate within the administration.
The administration’s defense of tariffs has complicated efforts to delay payments, according to people familiar with the debate. Mr. Trump has often said Chinese or other exporters pay the tariffs. In fact, U.S. importers pay them and frequently pass the extra cost on to American retailers, wholesalers and consumers.
The Wall Street Journal on March 27 reported the administration was moving to delay tariffs payments broadly. Asked about the Journal report that day, Mr. Trump called it “fake news.”
Mr. Trump has touted tariffs as a way to encourage domestic manufacturing and put pressure on trading partners to open up their markets to U.S. exports. At the same time, tariffs raise the costs of raw materials and components for auto makers and other manufacturers.
American steel producers and others that benefit from tariff protection are likely to push hard against any efforts to roll them back, especially during an election year and an economic downturn.
Read the original article here.
